Here is more evidence of a nation of consumers that have slammed their wallets shut.
Of course, that wouldn’t be much of a problem if 72% of our GDP wasn’t dependent on consumer spending-but it is.
From CNNMoney by David Goldman entitled: Spending: Lowest rise in 47 years
“Consumers continued to retrench in December, capping off the worst year for consumer spending since 1961, according to a government report released Monday.
A Commerce Department report showed spending by individuals fell 1% last month, after dropping a revised 0.8% in November. Economists surveyed by Briefing.com had forecast a 0.9% drop.
“The report shows that consumers are in a mood to rebuild their savings but not to go out and spend,” said Mark Vitner, economist at Wachovia. “Generally that’s a good thing, but not when everyone does it at the same time.”
December marked the sixth-straight month in which consumers cut back on their spending, a decline that accelerated dramatically in the last three months. For the fourth quarter, spending fell a record 8.9% – the worst quarter for spending since the Commerce Department began tracking that statistic in 1947.
Spending for the full year rose just 3.6%, the lowest increase in 47 years.
That’s a particularly troubling sign for the economy, because consumer spending accounts for more than two-thirds of the nation’s gross domestic product. Accordingly, the Commerce Department said GDP fell by 3.8% in the fourth-quarter, the sharpest decline in 26 years.”
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